New Jersey car insurance requirements
Though New Jersey drivers can select the state’s basic minimum-coverage policy, it has limited protections and doesn’t include bodily injury liability coverage. Most drivers in the Garden State opt to purchase a standard policy, which includes bodily injury liability, additional protections, and higher policy limits.
Below, you can compare the basic and standard coverage options in New Jersey. Drivers in the state must at least purchase the minimum coverage included in the basic policy.
|Coverage Type||Basic (Minimum)||Standard (Optional)|
|Property damage liability||$5,000 per accident||$25,000 per accident (up to $100,000 or more)|
|Personal injury protection||$15,000 per person, per accident (up to $250,000 for specific injuries)||$15,000 per person, per accident to $250,000 or more (limited to $250,000 for specific injuries)|
|Bodily injury liability||Optional $10,000 per accident||$25,000 per person and $50,000 per accident (up to $250,000 per person and $500,000 per accident)|
|Uninsured/underinsured motorist coverage||None||Up to liability coverage limits|
|Right to sue||Limited||Choice of limited or unlimited|
Property damage liability
Property damage liability protects you financially if you cause an accident that wrecks someone else’s property. Coverage can include harm done to another person’s vehicle and structures like fences, mailboxes, or lampposts.
New Jersey law requires you to have property damage liability protection. Your policy includes up to $5,000 per accident when you purchase basic coverage. If you opt for a standard policy, your policy limit can range from $25,000 per accident to $100,000 or more.
Personal injury protection (PIP)
To address medical costs, New Jersey requires all drivers to carry personal injury protection (PIP) coverage. It kicks in if you or anyone your policy covers faces injuries due to an auto accident. It pays for medical expenses even if you caused the crash, including the cost of treatment and reimbursement for lost wages.
You must have at least $15,000 per person or per accident in PIP coverage, whether you choose basic or standard coverage. The limit extends to $250,000 for certain injuries, including brain trauma, spinal cord damage, and other severe injuries. However, drivers with a standard policy can increase limits to $250,000 or more.
Bodily injury liability
Though PIP covers your medical bills, it doesn’t cover injuries you cause to others in a car accident. That’s why bodily injury liability is so important — it protects you against claims and lawsuits if you injure someone.
New Jersey’s basic policy doesn’t automatically include bodily injury liability, but you have the option to add $10,000 in coverage to the policy. If you select the standard policy, bodily injury liability starts at $25,000 per person and $50,000 per accident but can increase to as much as 10 times that if you want more extensive coverage.
Uninsured/underinsured motorist (UM/UIM)
New Jersey has the lowest rate of uninsured drivers in the country, at 3%, according to 2023 data from the National Association of Insurance Commissioners (NAIC). However, that statistic doesn’t include underinsured drivers. If another driver causes a car accident, their coverage might not sufficiently cover your damages. UM/UIM coverage can bridge the gap.
A basic policy doesn’t include UM/UIM coverage. If you choose a standard auto policy, you can buy UM/UIM coverage to match the limits you choose for your liability protection.
New Jersey Special Automobile Insurance Policy
New Jersey SAIP
If you’re in a particularly tight financial position, consider the Special Automobile Insurance Policy (SAIP). It’s available only to drivers who qualify for Federal Medicaid with hospitalization. Eligible drivers can earn an incredibly affordable rate of $365 per year ($1 per day). You can pay in two separate installments or earn $5 off the price by paying it all up front.